1. Physical Distribution
Managing Retailing,
Wholesaling, and
Physical Distribution

2. Four Levels of Retail Service
Self-service
Self-selection
Limited-service
Full-service

3. Retail Positioning Map
Broad
Narrow
Breadth of
product line
Bloomingdale’s
Wal-Mart
Tiffany
Kinney
Shoe
Value added
Low
High

4. Classification Of Retailer Types
Store Type Length and Breadth of Product Assortment
Specialty Stores
Narrow Product Line, Deep Assortment
Department Stores
Wide Variety of Product Lines i.e. Clothing, Home Furnishings, & Household Items
Supermarkets
Wide Variety of Food, Laundry, & Household Products
Convenience Stores
Limited Line of High-Turnover Convenience Goods
Discount Stores
Broad Product Line, Low Margin, High Volume
Off-Price Retailer
Inexpensive, Overruns, Irregulars, and Leftover Goods
Superstores
Large Assortment of Routinely Purchased Food & Nonfood Products, Plus Services
Catalog Showroom
Broad Selection, Fast Turnover, Discount Prices

5. Retailer Marketing Decisions
Target market
Product assortment and procurement
Price
High-markup, lower-volume
Low-markup, higher-volume
Services and store atmosphere
Store activities and experiences
Communicatio ns
Location 11

6. Wholesaling
All the activities in selling goods or services to those who buy for resale or business use. 15

7. Why are Wholesalers Used?
Management
Services & Advice
Selling and
Promoting
Wholesaler
Functions
Market
Information
Buying and
Assortment Building
Risk Bearing
Bulk Breaking
Financing
Warehousing
Transporting

8. 16 1. Merchant wholesaler Full-service wholesaler
Limited-service wholesaler
2. Brokers and agents
3. Manufacturers’ and retailers’ branches and offices 16

9. Goals of the Logistics System
Provide a Targeted Level of Customer Service at the Least Cost.
Maximize Profits, Not Sales.
Higher Distribution Costs/ Higher Customer Service Levels
Lower Distribution Costs/ Lower Customer Service Levels

10. Logistics Systems Order Processing Costs Logistics Functions
Submitted
Processed
Shipped
Costs
Minimize Costs of
Attaining Logistics
Objectives
Logistics
Functions
Transportation Water, Truck, Rail, Pipeline & Air
Warehousing
Storage
Distribution
Inventory
When to order
How much to order
Just-in-time

11. Transportation Modes Rail Truck Water Pipeline Air
Nation’s largest carrier, cost-effective
for shipping bulk products, piggyback
Truck
Flexible in routing & time schedules, efficient
for short-hauls of high value goods
Water
Low cost for shipping bulky, low-value
goods, slowest form
Pipeline
Ship petroleum, natural gas, and chemicals
from sources to markets
Air
High cost, ideal when speed is needed or to
ship high-value, low-bulk items

12. Checklist for Choosing Transportation Modes
1. Speed.
2. Dependability.
3. Capability.
4. Availability.
5. Cost.

13. Rating Transportation Modes
(Door-to-
door
delivery
time)
(Meeting
Schedules
on Time)
(Ability to
Handle
Various
Products)
(No. of
Geographic
Points
Served)
(Per
Ton-
Mile)
Speed Dependability Capability Availability Cost
Rail
Water
Truck
Pipeline
Air
Source: See Carl M. Guelzo; Introduction to Logistics Management Englewood Cliffs, NJ:
Prentice Hall, 1986), p. 46.